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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(RULE 14D-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(D)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRAVELERS PROPERTY CASUALTY CORP.
(Name of Subject Company)
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TRAVELERS PROPERTY CASUALTY CORP.
(Name of Person(s) Filing Statement)
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
893939 10 8
(CUSIP Number of Class of Securities)
JAMES M. MICHENER, ESQ.
TRAVELERS PROPERTY CASUALTY CORP.
ONE TOWER SQUARE -- 8GS
HARTFORD, CONNECTICUT 06183
(860) 277-0111
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
WITH COPIES TO:
MARTIN LIPTON, ESQ. ERIC J. FRIEDMAN, ESQ.
Wachtell, Lipton, Rosen & Katz Skadden, Arps, Slate, Meagher & Flom LLP
51 West 52nd Street Four Times Square
New York, New York 10019 New York, New York 10036
(212) 403-1000 (212) 735-3000
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION.
NAME AND ADDRESS.
The name of the subject company is Travelers Property Casualty Corp., a
Delaware corporation ("Travelers"). The address of the principal executive
offices of Travelers is One Tower Square, Hartford, Connecticut 06183, and its
telephone number is (860) 277-0111.
SECURITIES.
The title of the class of equity securities to which this
Solicitation/Recommendation Statement (this "Statement") relates is the Class A
common stock, par value $.01 per share (the "Shares"), of Travelers. As of
March 21, 2000, there were 57,128,767 Shares issued and outstanding.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON.
NAME AND ADDRESS.
The name, business address and business telephone number of Travelers,
which is the subject company and the person filing this Statement, are set
forth in Item 1 above.
TENDER OFFER.
This Statement relates to the tender offer by The Travelers Insurance
Group Inc., a Connecticut corporation ("Purchaser") and an indirect wholly
owned subsidiary of Citigroup Inc., a Delaware corporation ("Citigroup"), to
purchase all outstanding Shares at a purchase price of $41.50 per Share, net to
the seller in cash (less any required withholding taxes), without interest
thereon, on the terms and subject to the conditions set forth in the Offer to
Purchase, dated March 23, 2000 (the "Offer to Purchase"), and in the related
Letter of Transmittal (the "Letter of Transmittal," which, together with the
Offer to Purchase, as they may be amended or supplemented from time to time,
constitute the "Offer"), copies of which are filed as Exhibits (a)(1) and
(a)(2) herewith, respectively, and are incorporated herein by reference in
their entirety. Citigroup and its subsidiaries already own 100% of the Class B
Common Stock, par value $.01 per share, of Travelers, which constitutes
approximately 85% of the outstanding Travelers common stock. The Offer is
described in a Tender Offer Statement on Schedule TO (which includes the
information required to be reported under Rule 13e-3), dated March 23, 2000
(the "Schedule TO"), which was filed with the Securities and Exchange
Commission on March 23, 2000.
The Offer is being made pursuant to the Agreement and Plan of Merger,
dated as of March 22, 2000 (the "Merger Agreement"), by and among Citigroup,
Purchaser and Travelers. Following the consummation of the Offer and the
satisfaction or waiver of certain conditions, Travelers will merge with a newly
formed wholly owned subsidiary of Purchaser (the "Merger"). Travelers will
continue as the surviving corporation. In the Merger, each outstanding Share
(other than Shares held in the treasury of Travelers or by any of its wholly
owned subsidiaries, or owned by Citigroup or Purchaser (except for Shares held
by Citigroup or any of its affiliates in a fiduciary or similar capacity on
behalf of third parties or held on account of debt previously contracted) or
held by stockholders who perfect and do not withdraw or otherwise lose their
dissenters' rights under Delaware law) will be converted into the right to
receive the merger consideration, which will be $41.50 per Share, net to the
seller in cash (less any required withholding taxes), or any higher price paid
per Share in the Offer. A copy of the Merger Agreement is filed as Exhibit
(e)(1) hereto and is incorporated herein by reference in its entirety.
The Schedule TO states that the principal executive offices of Citigroup
are located at 153 East 53rd Street, New York, New York 10043 and
that the principal executive offices of Purchaser are located at One Tower
Square, Hartford, Connecticut 06183.
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ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
CONFLICTS OF INTEREST.
Except as described or referred to in this Item 3, there exists on the
date hereof no material agreement, arrangement or understanding and no actual
or potential conflict of interest between Travelers or its affiliates and
either (i) Travelers, its executive officers, directors or affiliates or (ii)
Purchaser, Citigroup or any of their respective executive officers, directors
or affiliates.
1. CERTAIN ARRANGEMENTS BETWEEN TRAVELERS AND ITS EXECUTIVE OFFICERS,
DIRECTORS AND AFFILIATES.
Proxy Statement Disclosures. Certain contracts, agreements, arrangements
and understandings between Travelers and its executive officers, directors and
affiliates are described on pages 1-22 of Travelers' "Proxy Statement Relating
to the Annual Meeting of the Company's Shareholders to be Held on April 18,
2000" (the "2000 Proxy Statement") in the sections: "About the Annual Meeting,"
"Beneficial Ownership," "Election of Directors," "Directors' Compensation,"
"Executive Compensation," "Compensation Tables," "Retirement Plans," "Other
Transactions" and "Relationships with Citigroup and Affiliates," and in Items
10 through 13, inclusive, of Travelers' Form 10-K for the year ended December
31, 1999 (the "Form 10-K"). The 2000 Proxy Statement is filed herewith as
Exhibit (e)(2) and is incorporated herein by reference. Items 10 through 13,
inclusive, of the Form 10-K are filed herewith as Exhibit (e)(3) and are
incorporated herein by reference. The information incorporated by reference is
considered to be a part of this Statement, except for any information that is
superseded by information included directly in this Statement.
Company Benefit Plans. Prior to the execution of the Merger Agreement, the
Nomination, Compensation and Governance Committees of the Board of Directors of
Travelers (the "Travelers Board") took action to provide that the Shares
granted under Travelers' Capital Accumulation Plan (the "CAP Plan") will be
converted into cash in the Merger and deposited in either of two grantor trusts
to be established by Travelers, one of which will hold and invest the funds in
securities that provide for a fixed and/or variable rate of return and the
other of which will invest the funds in common stock of Citigroup (each, a
"Trust" and, collectively, the "Trusts"). The funds will be invested and held
in the Trusts until the end of the Restricted Period (as defined in the CAP
Plan). Travelers has amended its Stock Purchase Plan (the "Purchase Plan") to
provide that the Purchase Plan will terminate as of the closing of the Merger,
all elections made by participants of the Purchase Plan for the month of March
will be honored by Travelers and no new elections by any person to participate
in the Purchase Plan for any month after March will be honored.
2. CERTAIN ARRANGEMENTS BETWEEN TRAVELERS AND CITIGROUP.
The information set forth under "INTRODUCTION," "SPECIAL FACTORS --
Background of this Offer," "SPECIAL FACTORS -- Recommendation of the Special
Committee and the Company Board; Fairness of the Offer and the Merger,"
"SPECIAL FACTORS -- Opinion of Financial Advisor," "SPECIAL FACTORS -- The
Merger Agreement," "SPECIAL FACTORS -- Beneficial Ownership of Common Stock,"
"SPECIAL FACTORS --Transactions and Arrangements Concerning the Shares,"
"SPECIAL FACTORS -- Related Party Transactions," "THE TENDER OFFER -- Certain
Information Concerning the Company" and "THE TENDER OFFER -- Certain
Information Concerning Parent and the Purchaser" in the Offer to Purchase is
incorporated herein by reference.
3. INTERESTS OF CERTAIN PERSONS IN THE OFFER AND THE MERGER.
In considering the recommendations of the Travelers Board and the Special
Committee with respect to the Offer, the Merger and the Merger Agreement and
the fairness of the consideration to be received in the Offer and the Merger,
stockholders should be aware that certain officers and directors of Citigroup,
Purchaser and Travelers have interests in the Offer and the Merger which are
described in the sections of the Offer to Purchase listed below and which may
present them with certain potential conflicts of interest.
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The information contained under "SPECIAL FACTORS -- Beneficial Ownership
of Common Stock," "SPECIAL FACTORS -- Transactions and Arrangements Concerning
the Shares," "SPECIAL FACTORS -- Related Party Transactions" and "SPECIAL
FACTORS -- Interests of Certain Persons in the Offer and the Merger" in the
Offer to Purchase is incorporated herein by reference.
The Special Committee and the Travelers Board were aware of these actual
and potential conflicts of interest and considered them along with the other
matters described below in Item 4, "The Solicitation or Recommendation --
Reasons for the Recommendation."
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
RECOMMENDATION.
Recommendation of the Special Committee. At a meeting held on March 21,
2000, the Special Committee (i) unanimously determined that each of the Offer
and the Merger, both as contemplated by the Merger Agreement, is fair to and in
the best interests of Travelers and its stockholders; (ii) unanimously
approved, and recommended that the Travelers Board approve, the Offer and the
Merger; and (iii) recommended that the Travelers Board recommend acceptance of
the Offer and, if necessary, approval of the Merger Agreement by the
stockholders of Travelers.
Recommendation of the Travelers Board. At a meeting held on March 21,
2000, after hearing the Special Committee's recommendation, the Travelers
Board, by unanimous vote of all directors and based on, among other things, the
recommendation of the Special Committee, (i) determined that the Offer and the
Merger are fair to, advisable and in the best interests of Travelers and its
stockholders (other than Parent and Purchaser); (ii) approved the Offer, the
Merger and the Merger Agreement and the transactions contemplated by the Merger
Agreement; and (iii) recommended that Travelers' stockholders accept the Offer
and approve the Merger Agreement and the Merger. ACCORDINGLY, THE TRAVELERS
BOARD RECOMMENDS THAT THE STOCKHOLDERS OF TRAVELERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER AND, IF NECESSARY, APPROVE AND ADOPT THE
MERGER AGREEMENT AND THE MERGER.
A letter to the stockholders of Travelers, a letter to brokers, dealers,
commercial banks, trust companies and other nominees, a letter to clients for
use by brokers, dealers, commercial banks, trust companies and other nominees
communicating the Travelers Board's recommendation and press releases
announcing the Offer and the Merger are filed herewith as Exhibits (a)(3),
(a)(4), (a)(5), (a)(6) and (a)(7), respectively, and are incorporated herein by
reference.
The Travelers Board's recommendation is based in part on the oral opinion
(which was subsequently confirmed in writing) delivered by Morgan Stanley & Co.
Incorporated ("Morgan Stanley") to the Special Committee on behalf of the
Travelers Board on March 21, 2000, to the effect that, as of such date and
based on and subject to the matters described in the opinion, the price per
share of $41.50 to be received pursuant to the Offer and the Merger by
Travelers stockholders other than Citigroup and its subsidiaries, was fair,
from a financial point of view, to such stockholders. The full text of the
written opinion, which sets forth the assumptions made, the procedures
followed, the matters considered and the limitations on the review undertaken
by Morgan Stanley, is attached hereto as Annex A and filed herewith as Exhibit
(a)(8) and is incorporated herein by reference.
REASONS FOR THE RECOMMENDATION.
The reasons for the recommendation stated in this Item 4 are set forth
under "INTRODUCTION," "SPECIAL FACTORS -- Background of this Offer," "SPECIAL
FACTORS -- Recommendation of the Special Committee and the Board; Fairness of
the Offer and the Merger" and "SPECIAL FACTORS -- Opinion of Financial Advisor"
in the Offer to Purchase, and are incorporated herein by reference.
INTENT TO TENDER.
To the best knowledge of Travelers, after making reasonable inquiry, each
of Travelers' executive officers, directors, affiliates and subsidiaries, other
than those individuals, if any, for whom the tender of
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Shares could cause them to incur liability under the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, or to the extent
their Shares are Restricted Shares (as defined in the Merger Agreement),
currently intends to tender pursuant to the Offer all Shares held of record or
beneficially owned by them as of the date hereof.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
The information contained under "SPECIAL FACTORS -- Background of this
Offer," "SPECIAL FACTORS -- Recommendation of the Special Committee and the
Board; Fairness of the Offer and the Merger" and "SPECIAL FACTORS -- Opinion of
Financial Advisor" in the Offer to Purchase is incorporated herein by
reference.
Neither Travelers nor any person acting on its behalf has employed,
retained or compensated, or currently intends to employ, retain or compensate,
any person to make solicitations or recommendations to the stockholders of
Travelers on its behalf with respect to the Offer or the Merger.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth under "SPECIAL FACTORS -- Transactions and
Arrangements Concerning the Shares" in the Offer to Purchase is incorporated
herein by reference.
Except as set forth in this Item 6, no transactions in the Shares during
the past 60 days have been effected by Travelers or, to the best of Travelers'
knowledge, by any executive officer, director, affiliate or subsidiary of
Travelers.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Except as described or referred to in this Statement, no negotiation is
being undertaken or engaged in by Travelers which relates to or would result in
(i) a tender offer or other acquisition of the Shares by Travelers, any of its
subsidiaries or any other person, (ii) an extraordinary transaction, such as a
merger, reorganization, or liquidation, involving Travelers or any of its
subsidiaries, (iii) a purchase, sale, or transfer of a material amount of
assets by Travelers or any of its subsidiaries or (iv) any material change in
the present dividend rate or policy, or indebtedness or capitalization of
Travelers.
Except as described or referred to in this Statement, there are no
transactions, Travelers Board resolutions, agreements in principle, or signed
contracts entered into in response to the Offer that would relate to one or
more of the matters referred to in this Item 7.
ITEM 8. ADDITIONAL INFORMATION.
The information contained in the Offer to Purchase filed as Exhibit (a)(1)
herewith is incorporated herein by reference.
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ITEM 9. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
(a)(1) Offer to Purchase dated March 23, 2000.*+
(a)(2) Letter of Transmittal.*+
(a)(3) Letter from the Chairman and Chief Executive Officer of Travelers to Travelers'
Stockholders, dated March 23, 2000.+
(a)(4) Letter from the Dealer Manager to Brokers, Dealers, Commercial Banks, Trust
Companies, and Nominees.*
(a)(5) Letter to clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies, and Nominees.*
(a)(6) Text of press release issued by Citigroup, dated March 21, 2000.*
(a)(7) Text of press release issued by Travelers, dated March 21, 2000.*
(a)(8) Opinion of Morgan Stanley & Co. Incorporated, dated March 21, 2000 (attached
as Annex A hereto).+
(e)(1) Agreement and Plan of Merger, dated as of March 22, 2000, among Citigroup,
Purchaser and Travelers.*
(e)(2) Travelers' Proxy Statement Relating to the Annual Meeting of Shareholders to
be Held on April 18, 2000 (incorporated by reference to the Schedule 14A of
Travelers filed on March 17, 2000 (File No. 001-14328)).
(e)(3) Items 10 through 13 of the Form 10-K of Travelers for the year ended
December 31, 1999 (incorporated by reference to the Form 10-K of Travelers,
filed on March 13, 2000 (File No. 001-14328)).
(e)(4) Restated Certificate of Incorporation of Travelers, as amended (incorporated by
reference to Exhibit 3.01 of the Form 10-Q of Travelers for the period ended
March 31, 1997 (File No. 001-14328)).
</TABLE>
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* Incorporated by reference to the Schedule TO filed by Citigroup and
Purchaser on March 23, 2000.
+ Included in copies mailed to Travelers' stockholders.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete, and
correct.
TRAVELERS PROPERTY CASUALTY CORP.
By: /s/ James M. Michener
--------------------------------------------
Name: James M. Michener
Title: General Counsel and Secretary
Dated: March 23, 2000
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EXHIBIT (a)(3)
[TRAVELERS PROPERTY CASUALTY LETTERHEAD]
Travelers Property Casualty Corp.
One Tower Square-8GS
Hartford, CT 06138
March 23, 2000
Dear Stockholder:
On March 22, 2000, Travelers Property Casualty Corp. ("Travelers"),
Citigroup Inc., a Delaware corporation ("Citigroup"), and The Travelers
Insurance Group Inc., a Connecticut corporation and an indirect wholly owned
subsidiary of Citigroup ("Purchaser"), entered into a merger agreement
providing for the acquisition of all of the outstanding Class A common stock of
Travelers at $41.50 per share, net to the seller in cash (less any required
withholding taxes), without interest thereon.
Purchaser has today commenced a cash tender offer for all outstanding
shares of Travelers Class A common stock, at a price of $41.50 per share, net
to the seller in cash (less any required withholding taxes), without interest
thereon. The merger agreement provides that, following the tender offer, a
newly formed wholly owned subsidiary of Purchaser will merge with and into
Travelers and any remaining shares of common stock of Travelers other than
those owned by Citigroup, Travelers or Purchaser will be converted into the
right to receive $41.50 per share in cash, without interest.
At a meeting on March 21, 2000, your Board of Directors (the "Board"), by
unanimous vote based on, among other things, the recommendation of a Special
Committee comprised of Travelers' independent directors, (i) determined that
each of the tender offer and the merger is fair to, advisable and in the best
interests of Travelers and its stockholders; (ii) approved the tender offer and
the merger agreement and the transactions contemplated thereby; and (iii)
recommended acceptance of the tender offer and approval of the merger agreement
by Travelers' stockholders.
In arriving at its recommendation, the Board gave careful consideration to
the factors described in the enclosed tender offer materials and Travelers'
Solicitation/Recommendation Statement on Schedule 14D-9. Included as Annex A to
the Schedule 14D-9 is the written opinion, dated March 21, 2000, of Morgan
Stanley & Co. Incorporated, the Special Committee's financial advisor, to the
effect that, as of that date and based on and subject to the matters described
in the opinion, the price per share of $41.50 to be received by the holders of
shares of Travelers Class A common stock in the tender offer and the merger,
was fair, from a financial point of view, to those holders.
Enclosed for your consideration are copies of the tender offer materials
and Travelers' Solicitation/Recommendation Statement on Schedule 14D-9, which
are being filed today with the Securities and Exchange Commission. These
documents should be read carefully.
Sincerely,
/s/ Jay S. Fishman
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Jay S. Fishman
Chairman and Chief Executive Officer
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EXHIBIT (a)(8)
Morgan Stanley Dean Witter
1585 Broadway
New York, New York 10036
(212) 761-4000
March 21, 2000
The Special Committee of the Board of Directors
on behalf of the Board of Directors
Travelers Property Casualty Corp.
One Tower Square -- 8GS
Hartford, CT 06183
Members of the Special Committee on behalf of the Board:
We understand that Travelers Property Casualty Corp. (the "Company"), Citigroup
Inc. ("Parent") and an indirect subsidiary of Parent (the "Buyer") propose to
enter into a Transaction which will provide, among other things, for (i) the
commencement by the Buyer of a tender offer (the "Tender Offer") for all issued
outstanding shares of Class A common stock, par value $0.01 per share (the
"Class A Common Stock"), of the Company not already owned by or held by the
Buyer for $41.50 per share in cash, and (ii) the subsequent merger (the
"Merger") of a newly formed acquisition sub of the Buyer with and into the
Company. You have indicated that pursuant to the Merger, the Company will
become a wholly-owned subsidiary of the Buyer and each outstanding share of
Class A Common Stock of the Company, other than shares held in treasury or held
by the Buyer or any affiliate of the Buyer (except for shares held in a
fiduciary or similar capacity on behalf of third parties or held on account of
a debt previously contracted) or as to which dissenters' rights have been
perfected, will be converted into the right to receive $41.50 per share in cash
(the "Consideration"). We further understand that the Buyer beneficially owns,
directly or indirectly, 100% of the Class B common stock, par value $0.01 per
share (together with the Class A Common Stock, the "Common Stock"),
constituting approximately 85% of the outstanding shares of the Common Stock.
You have asked for our opinion as to whether the consideration to be received
by the holders of shares of Class A Common Stock of the Company (other than
Parent, its subsidiaries and affiliates) pursuant to the Tender Offer and the
Merger is fair from a financial point of view to such holders.
For purposes of the opinion set forth herein, we have:
(i) reviewed certain publicly available financial statements and
other information of the Company;
(ii) reviewed certain internal financial statements and other
financial and operating data concerning the Company prepared by
the management of the Company;
(iii) reviewed certain financial projections prepared by the
management of the Company;
(iv) reviewed the reported prices and trading activity for the Common
Stock;
(v) compared the financial performance of the Company and the prices
and trading activity of the Common Stock with that of certain
other comparable publicly traded companies and their securities;
(vi) reviewed the financial terms, to the extent publicly available,
of certain comparable purchase transactions;
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(vii) participated in discussions and negotiations among
representatives of the Company and Parent and their financial and
legal advisors; and
(viii) performed such other analyses and reviewed such other
documentation as we have deemed appropriate.
We have assumed and relied upon without independent verification the accuracy
and completeness of the information reviewed by us for the purposes of this
opinion. With respect to the financial projections, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the future financial performance of the Company. We
have not made any independent valuation or appraisal of the assets or
liabilities of the Company, nor have we been furnished with any such
appraisals. We have reviewed actuarial reports prepared by the Company with
respect to reserve adequacy of the Company and have relied without independent
verification upon such reports for purposes of this opinion. Our opinion is
necessarily based on economic, market and other conditions as in effect on, and
the information made available to us as of, the date hereof.
In arriving at our opinion, we were not authorized to solicit, and did not
solicit, interest from any party with respect to the acquisition of the Company
or any of its assets.
We have acted as financial advisor to the Special Committee on behalf of the
Board of Directors of the Company in connection with this transaction and will
receive a fee for our services.
It is understood that this letter is for the information of the Special
Committee of the Board of Directors and the Board of Directors of the Company
only and may not be used for any other purpose without our prior written
consent; provided however, that the Company may include the opinion in its
entirety as an exhibit to any report, statement, or schedule filed by the
Company with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 in connection with the Tender Offer or the Merger.
Based on the foregoing, we are of the opinion on the date hereof that the
Consideration to be received by the holders of shares of Class A Common Stock
(other than Parent and its subsidiaries) pursuant to the Tender Offer and the
Merger is fair from a financial point of view to such holders.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Phillip S. Barnett
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Phillip S. Barnett
Managing Director
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